Internal Control System

System to Ensure the Appropriateness of the Company’s Operations and Operational Status of the System

The Board resolves matters concerning the basic design and operation of the internal control system specified in the provisions of the Companies Act and the Ordinance for Enforcement of the Companies Act, as a system to ensure appropriate business operations of the Company, and promoting sound management and business operations by enhancing internal controls.

System to Ensure the Appropriateness of the Company’s Operations

  •  System for ensuring that the directors, managing officers, and employees of our company and subsidiaries execute their duties while they comply with laws and regulations, and the Articles of Incorporation
  •  System for storing and managing the information related to the execution of duties of our directors
  •  System for the rules, etc. that are related to the management of the risk of losses of our company and subsidiaries
  •  System for ensuring that the directors of our company and subsidiaries effectively execute their duties
  •  System for reporting to our company about the execution of duties of the directors, etc. of subsidiaries
  •  Matters relating to the employees who are asked to support auditors' duties by the auditors
  •  Matters relating to the guarantee of the independence of the abovementioned employees from the directors and of the effectiveness of the orders given by the auditors
  •  System for having the directors, managing officers, as well as employees of our company, and the directors, auditors, managing officers, as well as employees of subsidiaries, or the persons receiving a report from any of the abovementioned persons report to our Audit & Supervisory Board and its members and other systems for reporting to auditors
  •  Matters relating to payment for auditors for executing their duties and other systems for ensuring that audits are effectively carried out by the auditors

Operational Status of the System to Ensure the Appropriateness of the Company’s Operations

Compliance Initiatives

The Company established an annual compliance program ("the program") and confirms the status of progress through the Compliance Committee, which convenes four times a year. In the program, regular compliance training for employees and the distribution of compliance-related news ensure thorough compliance, including severing any ties with anti-social forces. Compliance training is also separately provided for officers.
In addition, the internal reporting system or Compliance Hotline ensures prompt detection and resolution of issues as well as to protect the whistleblower. Reports are regularly made to the Board of Directors concerning the status of operations and reporting. Moreover, since FY2018, we added an independent outside contact, as well as one female manager as an internal contact, with the aim of improving the effectiveness of the internal reporting system.
In FY2020, we incorporated power harassment into our rules and provided training on preventing the abuse of power in response to the related legislation.

Efforts to Manage the Risk of Losses

The Company’s Risk Management Committee convenes every quarter and conducts appropriate risk management in response to fluctuations in risk by assessing the predetermined monitoring items. As for BCP preparedness, we review our Basic Plan for Business Continuity (BCP) and the BCP Manual. In addition, we conducted BCP drill in November 2020. This time, we used a remote meeting format, assuming that some committee members could not come to work due to a major earthquake, and confirmed how we respond in an emergency.

Initiatives for Ensuring Appropriate and Efficient Business Execution

In addition to regular Board of Directors meetings held each month, the Company also holds extraordinary Board of Directors meetings as required to ensure effective decision-making and the oversight of business execution. We are also striving to ensure efficiency, for example by consolidating common operations in the Group to a shared service company.

Initiatives to Ensure Appropriate Group Operations

The Company’s subsidiaries apply for approval and make reports on important issues based on the Regulations for Business Management of Affiliated Companies. Furthermore, the Corporate Audit Department conducts audits with appropriate intervals and Business Planning and Management Department regularly provides guidance to the subsidiaries.
Companies that have recently become subsidiaries receive individual guidance on areas including risk management based on the Company regulations.

Initiatives to Ensure the Effectiveness of Audits by the Audit & Supervisory Board Members

The Company has an Audit & Supervisory Board, which meets once a month in principle, to make decisions on, make reports, and discuss important issues related to auditing. In addition, the Audit & Supervisory Board members ensure the effectiveness of audits by attending various meetings and reviewing the minutes of meetings.
The Audit & Supervisory Board Office was established to create a system for promptly responding to requests from Audit & Supervisory Board members.

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